So you want to slash college debt?

Higher education is putting young Americans in a bind: As a degree
becomes more crucial to their professional futures, it also becomes more
daunting to their finances. The price of a college degree is rising faster than
inflation, much faster than American salaries, even faster than medical
expenses.

What to do? On the campaign trail, the issue has emerged as catnip
for Democrats eager to nab young voters: Hillary Clinton and Martin O’Malley
have proposed plans that would allow students to graduate “debt-free,” while
Bernie Sanders has gone even further, proposing a sweeping overhaul that would
make college completely free.

Free college is unlikely in the U.S., but within the higher-ed
world, everyone from college presidents to financiers have been hatching ideas
for getting costs and student debt under control. Some ideas would create new incentives
for students, others would shift responsibility to colleges; some even involve new
financial instruments. Below, 8 out-of-the-box ideas being floated or piloted right
now.

1. Pay students to hurry up

“Four-year colleges” are something of a lie: at a majority of
them, fewer than half the students graduate on time. Those extra terms add up,
not only in tuition and fees but also in lost income. To keep students on a
faster and financially sounder track, a growing number of schools are offering
cash bonuses to students who finish in four years or less. Attend Howard
University, for example, and you’ll get half-off your final semester of tuition
if you graduate in four years. That saves just under $6,000 for students paying
the sticker price. And students graduating from Texas state universities on
time can receive $1,000 rebates on graduation.

Will it
work? For colleges who think their image could get a boost from
improving their graduation rates, the idea makes sense. But when it comes to
bringing down student debt, on-time graduation only goes so far, and it won’t
appeal to all colleges.

2. The “job or a refund" modelStudent debt is a perfectly sensible investment if it leads to promising
career. Without a good job, it can quickly become a crisis. Some coding
bootcamps are now insuring against that risk by refunding tuition to students
who don’t get jobs after graduating. These are short-term, time-intensive
courses that have caught on like wildfire in Silicon Valley in recent years. Code
Fellows in Seattle offers a full
refund to graduates who fail to find jobs in their field, and says it
only has a 3 percent refund rate.

Will it
work? It’s hard to know if the model extends to degrees less narrowly
focused on single job skills. And the bootcamps themselves are unaccredited
schools whose growth is bringing them up against student-protection
regulations; California’s Bureau for Private Postsecondary Education sent a letter last year demanding the bootcamps come into compliance with its rules.

3. Cash to schoolsEvery year Congress hands money to 9.4 million low-income students
in the form of federal Pell grants, but the original idea was to supplement that
with a second pot of money paid directly to colleges and universities to
support their education. That never happened. Forty years after the law passed,
Louisiana State University President F. King Alexander has argued that reviving
direct school aid would give public universities a fresh incentive to serve
low-income students, rather than recruiting high-paying students from out of state
or even abroad.

Would it
work? Federal payments might help keep tuition down and prevent
low-income students from getting pushed toward expensive private or for-profit
colleges. But Pell grants already cost $35 billion per year, and it’s tough to
imagine lawmakers finding more money under today’s tight budget constraints.

4. A futures market in student lives

In the business world, companies raise immediate capital by promising
investors a portion of their future profits. Should students be able to do the
same? A crop of startups are offering a new financial product called “income
share agreements,” in which investors give students money upfront for college
in exchange for a percentage of student income after they graduate. Start-up lenders
such as Pave and 13th Avenue have gotten this idea off the ground, and they say
they’ve enjoyed good results so far. The idea isn’t new: In fact, it’s an old
Milton Friedman plan. More recently it’s been adopted by Sen. Marco Rubio, who has
proposedlegislation clearing up a
legal grey area currently surrounding these deals.

Will it
work? Right now the legal
questions make it a challenge; critics also make the moral argument that garnishing
future income sounds like indentured servitude. And the idea only works for
students whose futures look good enough that investors want to buy in.

5. Goodbye, football

One reason college is expensive is the huge cost of running a
brick-and-mortar campus, with all its amenities and employees. A few
experimental colleges are trying to slash costs by radically paring these
things away, teaching students largely or entirely online, without most of the
things that traditionally make up a campus. With the help of outside donors, a California-based
school called the University of the People has developed a nearly free degree
in two majors; students pay only minor fees. Another, the $10,000-per-year
Minerva Project, is testing out elite-style education offered online to
students who live in Minerva-operated dorms around the world—and who don’t mind ditching the football team.

Will it
work? On a small scale, it might. The University of the People expects
5,000 enrollees next year. But the idea has limited appeal; most students still
prefer to learn in person, and colleges—especially those in the top tier—have
deep ties to the campus-based model.

6. Let bankrupt borrowers discharge their loansWhat makes student loans especially onerous is that they’re one of
the only forms of debt that can almost never be discharged: They follow
borrowers even through bankruptcy, and the federal government can even garnish
wages or tax returns from graduates who default. As President Barack Obama
works to cement his higher education legacy, the White House has floated making
it easier to discharge some loans, those taken out from private lenders that
aren’t federally guaranteed, in an effort to help ease student debt.

Will it
work? For the private loans, it might actually make borrowing more difficult.
Without that extra ability to collect, private lenders would have higher risk,
and loans would likely get smaller or more expensive. And even Obama has shied
away from proposing that borrowers could walk away from their federal loans; that
would leave taxpayers on the hook.

7. Skin in the gameOne idea that sounds far-fetched is actually catching on in
discussions this fall about rewriting the country’s main higher education law:
that colleges should have a financial stake in whether their students succeed.
As it stands, federal grants and loan guarantees make it easier for colleges to
jack up tuition with little incentive to produce results for borrowers. That
might change if they had a minor equity stake in student loans, or had to pay a
fee when students default— also known as “skin in the game.”

Will it
work? Not if colleges have anything to say about it. “The higher
education lobby—specifically the private higher education lobby—is extremely
effective at lobbying” to keep the current deal in place, said Alexander Holt,
policy analyst at New America. But as the public grows more and more restless
about mounting higher education costs, political pressure could force them to
make a deal.

8. Go to Europe!

College is far cheaper in Europe, where most students attend
public universities and countries devote more government resources to higher
education. Germany went completely tuition-free in 2014. The deal applies to
foreigners, too, and many college and graduate programs are taught in English. Norway, too, charges
no tuition or fees to international students. Amazingly, this means it can be far
cheaper for an American student to fly overseas, rent an apartment and attend a
top German university than it is to go to their local state school.

Will it
work? For some students, it already does—in
2011, the last year for which data is available, more than 4,000 Americans
sought degrees in Germany. But Europe is still
out of reach for less well-off Americans, and there will surely be limits: it’s
unlikely European countries would keep their doors open if that 4,000 students
became 400,000.